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Jaguar Land Rover to build cars in Saudi Arabia

Jaguar Land Rover today took a step which could lead to the firm building cars in Saudi Arabia. This is just weeks after it started building a factory in China to produce cars.

It's signed a letter of intent with the Kingdom of Saudi Arabia and both will now look at building a factory there.

Initially, the plans are for the Saudi government to make aluminium parts and bodies, but according to ITV Business Correspondent, Mark Gough, the ultimate aim will be for Jaguar Land Rover to build cars there too.

Jaguar Land Rover's sales are rising fast - particularly in wealthy and emerging markets and it makes business sense for the company to build cars in the markets where the most customers are. Last month it started building a factory in China with Chinese car firm Chery.

We are committed to further international partnerships to meet record demand for our highly sought after vehicles. The Kingdom of Saudi Arabia is an attractive potential development option, complementing our existing advanced facilities in Britain and recent manufacturing plans to expand in other countries including India and China.

– Dr Ralf Speth, Chief Executive of Jaguar Land Rover

So, why Saudi Arabia? There are large aluminium deposits in Saudi Arabia and Jaguar Land Rover is building cars from aluminium because it's lighter than steel. Lighter cars burn less petrol and can also be powered by electric engines which Jaguar Land Rover is developing. Saudi Arabia - with a large wealthy population - is also where Jaguar Land Rovers are expected to sell more cars.

The company said the Saudi Arabian plant - if it goes ahead - will complement the firm's factories in Britain - at Birmingham, Solihull and Halewood in Merseyside.

The letter of intent is a formal agreement between Jaguar Land Rover and the Kingdom of Saudi Arabia to begin a feasibility study into setting up an aluminium factory and to begin compiling a business case for the venture.

Dr Ralf Speth, added: "This is an exciting project that could enable Jaguar Land Rover to establish a Joint Venture partnership in a part of the world where luxury vehicle sales are expected to rise. If we proceed, it will complement our existing expansion in the UK and elsewhere."